SUMMARY
Amazon will not be liable for recovery of payments till the next hearing in December this year
Prior to this, the Supreme Court had granted a stay to the ecommerce major in May, which was extended yet again in July
The CCI imposed the penalty on Amazon for failing to identify and notify strategic interest in Future Retail during the 2019 acquisition of stake in Future Coupons
In a major relief for Amazon in the Future Group case, the Supreme Court on Friday (September 22) reportedly stayed the INR 202 Cr penalty imposed by the Competition Commission of India (CCI) on the ecommerce major.
Amazon will not be liable for recovery of payments till the next day of hearing. As per BQ Prime, the matter will next be heard in December this year.
This is the third stay granted by the apex court to Amazon this year. Prior to this, it granted a stay to the ecommerce major in May, which was extended yet again in July.
At the heart of the matter is the ecommerce giant’s purchase of 49% stake in Future Coupons, a promoter group entity of Future Retail, in 2019.
Two years later in 2021, the competition watchdog suspended the approval granted to the 2019 deal saying the ecommerce major had not been upfront about the actual scope and purpose of the deal.
The CCI said that Amazon failed to identify and notify strategic interest in Future Retail and suppressed the actual purpose of the deal.
Eventually, the CCI kept the investment in the Future Group entity in abeyance and directed Amazon to pay a penalty of INR 202 Cr.
While the CCI cleared the deal previously in 2019, the matter came to light after Amazon initiated arbitration proceedings against the troubled retail brand as Reliance began its takeover of the Future Group. In its petition, Amazon sought transfer of assets of Future Retail in which Future Coupons held a 9.82% stake. After hearing the matter, the CCI said that Amazon contradicted its stand during the proceedings about the scope of the investments in Future Coupons.
As per the watchdog, Amazon ‘pretended’ to be interested in Future Coupons when it was actually interested in Future Retail and that investment was part of the ecommerce major’s strategy to get a foot in the door in India’s retail business.
Amazon has been locked in an extended legal battle with the beleaguered Future Group and Reliance over the sale of Future’s retail businesses and assets to the Mukesh Ambani-led company for INR 25,000 crore in 2020. The US-based ecommerce major contested the sale in multiple courts.
As legal cases piled up, Reliance cancelled the INR 24,713 Cr deal with Future Group in April last year.
With the Amazon-Future Group matter now pending before the Singapore International Arbitration Centre, it remains to be seen which party the tribunal finally sides with.
